About 21 years after the securities scam involving stock broker Harshad Mehta, the Supreme Court on Wednesday indicted the National Housing Bank (NHB) for initiating legal process against State Bank of India (SBI) to recover the amount — which NHB had lend to Mehta — to hide its own misdeeds.
A three-judge bench headed by justice RM Lodha, also pulled up the SBI for its “irresponsible” handling of the loan transactions worth Rs 95 crore. It did not even spare the government for failing to make an attempt to find out the truth behind the scandal. SC further castigated the finance ministry for not resolving the dispute between the two public sector banks despite a direction.
The court, however, held that SBI did not owe any money to NHB. It set aside the special court order of 1999 that directed SBI to pay Rs 250 crore including 19% interest on the principle amount of Rs 95 crore to NHB.